Originally published in Dagens Industri. Written by Reet Waikla.
Henrik Ekelund, the President and CEO of BTS, a leading strategy implementation consultancy, has a clear strategy ― to always grow and to invest during economic downturns.
Henrik Ekelund is a super consultant specialized in transforming leaders' business dreams into reality on a global scale. He was named "Entrepreneur of the Year" in 2010.
BTS's message is clear ― many leaders are fired not because they lacked vision, but because they failed to implement strategic initiatives within the organization. "Research shows that two-thirds of strategic transformations end in failure. The common reason: management underestimates the time and resources required to effectively implement new strategies and embed change programs. This is where we come in," says Ekelund.
The foundations for the success of the now 26-year old, publically listed company, BTS, were laid when the former management consultant Ekelund and his team started customizing business simulation programs for each individual client company. Four years later, they had expanded to include three new financiers and had further developed a more static computer program.
Not one unprofitable year
"We have never made a loss. Profits and turnover have increased almost every year," says Ekelund, the largest individual owner with 44 percent of the votes. He receives Dagens Industri (DI) at BTS's headquarters, located on two floors in Ostermalm in Stockholm, but he only visits. Fourteen years ago, he moved to the US to establish the business in the American market, and since 2004, he has lived in Switzerland. He says that he has "lots of energy" and adds that he has endurance.
Today, the strategy execution consultancy generates sales of about SEK 700 million, achieves a pre-tax profit of about SEK 90 million, and has 380 employees at 29 offices around the world. To reach this point, Ekelund made investments during all three recessions.
My strategy has stayed consistent ― to always grow and invest during economic downturns, a point of differentiation from many other companies. Our methodology is the same as we teach ― to focus on the right clients, the right projects and the right results." This strategy has led the company to success. During the first nine months of 2012, turnover increased by 12 percent, as calculated in Swedish kronor, and pre-tax profit rose by 16 percent, despite weak economic conditions.
When BTS started customizing simulation-based programs for clients, they were pioneers. "Doctors and pilots used simulators, so why not businesses," Ekelund asked himself. "The participants can test and practice different strategies within the simulated environment and immediately recognize the consequences of their decisions on turnover and profit. For instance, sales people can see the consequences of various price negotiation strategies, and as a result, become better at pricing back on the job."
Thoughtfully prepared to reflect the client's business and strategic priorities, the programs take one to three days while follow-up ensures application. Not only used within the client's organization, BTS's own sales people and employees continually go through the simulation programs as well.
Lack of efficiency is a waste
"The greatest waste in society is ineffective leadership. Many leaders do not realize the potential in the company because good leadership is lacking. There is enormous potential for improvement at most companies," says Ekelund. He is analytical, creative and communicative, but says he is not as good at negotiating, administering and organizing. "Armed with this knowledge, I make sure to cover my shortcomings with external competencies."
Initially, BTS targeted the senior level of the organization, but now BTS has penetrated further down the corporate hierarchy.
Has become world-leading
The company established itself internationally at an early stage, and in 2001, BTS went to the stock exchange to obtain additional capital. "Now world-leading within our field, our clients include many large, global companies such as Accenture, Coca-Cola, Microsoft, Deloitte, and Unilever. More than 25 of the Global Fortune 100 companies are clients," reflects Ekelund.
North America accounts for 65 percent of revenue, Sweden for 6 percent, and the rest of Europe for 12 percent, while emerging markets account for 17 percent. "I always plan on a long-term basis. New emerging markets for us are Asia, Latin America and Africa, but also Europe," states Ekelund
Given the company's success, it is surprising that an American subsidiary ― APG ― has seen turnover decline by 29 percent in two years. This will now be closely analyzed moving forward.
The right focus is key
Ekelund maintains that everyone ― both individuals and companies ― can be better and more profitable. "It is not primarily a matter of working harder, but of identifying the right focus and more efficient working methods," says Ekelund. "The trap that many companies fall into is that they concentrate on the wrong clients. They also get involved in projects that are outside of their core strengths. And during a crisis, they fire the people who add long-term value for the business," he says.
Ekelund practices what he preaches. He does not accept client companies where the management is not committed, does not think long-term, or wants to squeeze out the last dollar in profits from existing operations. "Companies in crisis situations that are undergoing rapid downsizing seldom become clients of BTS. We mainly work with clients that want to generate growth and that think long-term."
Facts about BTS
The listed company: BTS
Owner: Henrik Ekelund has 44 percent of the votes. Stefan af Petersens has 11 percent, Stefan Hellberg and Jonas Åkerman have around 4 percent each. The remaining votes are held by large institutional owners and other private persons.
Turnover, the entire Group: MSEK 698 (2011)
Profit after net financial items: MSEK 88 (2011)
A boost for women: Henrik Ekelund and his employees are supporting the relief work organized by Hand in Hand, a Swedish non-profit dedicated to fighting rural Indian poverty by enabling self-sufficiency. BTS had developed a learning solution designed to teach thousands of female entrepreneurs basic business ground rules.